2012 PA Impact Fee Revenue of $180M – Where Will it Go?

February 16, 2012

Pennsylvania finally passed new Marcellus Shale drilling legislation last week, and Gov. Corbett signed the new legislation into law on Monday of this week (see this MDN story). One of the key provisions, and certainly one of the most contentious, is a provision to collect a new impact fee. But let’s be honest among friends, it’s really just a tax (see this MDN story for why we call it a tax). Regardless of what it’s called, the new fee/tax will raise an estimated $180 million in new revenue for state and local coffers this year alone. So where will all that money go?

The County Commissioners Association of Pennsylvania has done an excellent analysis of the new impact fee, what it means for counties and municipalities, where the money will go and what it will be spent on (see the full report embedded below).

Impact fee revenue, which is based on the number of wells spud, or started to be drilled (or already drilled), will be collected and overseen by the state Public Utility Commission (PUC). The total fee is broken into two big slices of the pie, 60 percent goes to the county and local municipalities in the county were wells are drilled, and 40 percent is what MDN calls “spread the wealth around” money.

The 40 percent slice will fund state initiatives like a program to convert fleets to running on natural gas, beautification projects, water and sewer projects, lining back pockets of politicians, you get the idea. The 40 percent slice will be used for all those wonderful, productive, beneficial things Harrisburg can think up to do with a new pot of gold.

The 60 percent slice that stays local is to be divided as follows:

Host counties receive 36%, distributed pro rata based on the number of spud wells in the county relative to the number of spud wells statewide

Host municipalities receive 37%, distributed pro rata based on the number of spud wells in the municipality relative to the number of spud wells statewide

The remaining 27% is distributed among all municipalities in a host county. Half is distributed among host municipalities and non-host municipalities that are either contiguous with a host or are within five miles of a spud well, with half of that distributed on relative population and half based on relative road miles. The other half is distributed among all municipalities in the county, again half based on relative population and half based on relative road miles.

The county and municipal governments are authorized to use the new money they receive for the following purposes:

Roadways, bridges, and public infrastructure

Water, storm water, and sewer

Emergency preparedness and public safety

Environmental and recreation programs, including conservation districts, open space, and agricultural preservation

Preservation and reclamation of water supplies

Tax reductions, including homestead exclusion

Availability of safe and affordable housing

Records management, GIS, and information technology

Delivery of social services

Judicial services

Deposit into capital reserve for use on projects permitted under this section

Career and technology centers for training related to the oil and gas industry

Local or regional planning initiatives under the Municipalities Planning Code

Funds should go to infrastructure where drilling occures and for conversion from oil/coal to natural gas, like BUILDING A POWER PLANT. Beautification and pocket lining can come later if at all. But All-in-all, probably compaared to other states, the gas drilling companies did not get that raked over the coals in PA.

The story is inaccurate. ~$25.5M from the 2011 fee will be given to state agencies and funds. That’s off the top. So the best estimate for the sum that will be subject to the 60/40 distribution is not the projected $180M, but $180M – $25.5M = $155.5M. 60% of 155.5 is $92.4M. The municipalities and counties that are bearing the costs of the development will divy up an estimated $92.4M.

That’s what the law provides for. There are some big ticket items on the list of potential uses. Bridge and road repair, sewer systems.

Anonymous

Now you want something from Fracking, don’t you!! You should live your life like a third world country citizen lives, they are the true Greenies and not because they want to be.Then you’ll get some appreciation for the comforts you take for granted like a car, heat, electric. Live the life as an example JW, ride a horse, heat your house, run your electric w/o using a fossil fuel, I Dare you too!! Then you can talk your talk.Just like our President lots of HOT air coming out with nothing of value to add. Because of your Anti views you should reap no reward from the work of others gathering this precious gift. You say give money to education, the education needs to start with you.

In summary, there are two types of people in the world, those who support NG extraction from shale no matter how or where it is done, and those whose views are worthless hot air.

President Obama is a special case, right? On every topic, the only thing coming out of his mouth is worthless hot air.

Anonymous

People are just looking into the money and jobs this is creating, but failing to realize the health impacts this has had and will have for future generations. Please educate yourselves on fracking and read the stories there have been many deaths and cancer among other illnesses caused because of the toxic hazardous waste released into the water and air you and your families drink and breathe. Im not sorry to say no amount of money could replace a loved one fallen ill to the effects of this misery we are imposing on ourselves all to save a buck. You cannot drink money so please think what will be left when our air is polluted and there is no water safe enough to drink. Not to mention, the land and wildlife being destroyed by this…look it up cause I’m left with the vision of dead animals with tumors, do you eat meat??? this will affect everyone

Yes, let us do educate ourselves… so where are these “deaths and cancer” cases??
What are you referring to exactly?

Anonymous

just look it up , it’s out there if you just do your homework you shall see…im not going to write a book for you on what already exists in black and white.

Anonymous

You shouldn’t believe everything you read on the internet.

Anonymous

Naaa. How ’bout YOU provide one link, just one link, to a story where some one died from cancer and it can be directly attributed to fracking. Challenge is on. You just came in here and said WE should educate ourselves on this matter. I have been for the last 3 years. So, unless you are going to back up what you preach us to do with a factual article from a reputable source of information, please exit stage right and go back to the Josh Fox fan club page where facts are not important.

Anonymous

rei33, with no disrespect your a knucklehead, your the prime example of a blind less follower that reads an Anti article then jumps on the blind Anti bandwagon.How many people die of Lung Cancer from smoking? We have evidence it kills you, there are numerous advertisements to stop smoking. But there are still millions of smokers.Where are you in the battle to stop farmers from growing Tobacco, or at a Phillip Morris cigarette plant? How about those Coal plants, burning up tons of Coal per day.Been to a Greenie Wind Mill farm lately?have you been to a Gas Station supplied by OPEC oil lately? Filled up that Subaru and sent all your money( earned or entitlement) over seas? How come your not bitching about that? Your rant is old hat, that’s why the future of NG will do fine. All you Anti’s had your five minutes of fame, now move out of the way and let America do what it does best, come back from the abyss, then let knuckle heads like you can get a piece of the action. Of course you’ll be the first one in line with his hand out, without any thanks just a sense of entitlement.